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#148654 - 01/12/04 07:06 PM Correspondent Banking
AMXSteve Offline
Member
Joined: Jun 2001
Posts: 75
Wilmington, OH, USA
We are looking at the prospect of providing correspondent banking services for a small thrift in our area. The relationship would consist of accepting the institution's daily checks for deposit so that they may enter into the payment system and providing cash orders to the institution. What are some the BSA implications/ precautions we should be aware of? I'm trying to think of the due dillegence and precautions that should be taken from a BSA/AML standpoint. We've never done anything of this nature, so I'm trying to figure out where to start.
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#148655 - 01/14/04 02:12 PM Re: Correspondent Banking
Pale Rider Offline
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under the Lone Star
This isn't my area of expertise, but aren't federally insured institutions exempt from BSA in providing services to one another ? Where are the BSA officers on this question ? Hope you get more responses.
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#148656 - 01/14/04 02:22 PM Re: Correspondent Banking
Retread Offline
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As far as BSA/AML is concerned, all you have to do is to file a Designation of Exempt Person Form for the other bank to cover the cash deposits/withdrawals. If you are dealing with a federally insured institution, there are no monitoring requirements and no biennial renewal requirements.

The rest of your question is outside my area of knowledge. Of course, you should have some kind of contract in place to offer protection to both parties.
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#148657 - 01/14/04 03:43 PM Re: Correspondent Banking
skinnyminny Offline
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Joined: Mar 2002
Posts: 395
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Most of the BSA/AML problems with Correspondent Banking falls under the "Foreign Correspondent Banking" restrictions of the USA Patriot Act.

The risk in doing business with a small thrift in your area is probably very low compared to a foreign correspondent banking relationship. Before engaging in the correspondent relationship with your local thrift make sure you do some due diligence on the thrift.

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